Brand Bidding

What brand bidding is and why it raises your brand CPC

Branddi · Published on

What brand bidding is and why it raises your brand CPC

Brand bidding is when an advertiser buys your brand name as a keyword to appear ahead of you in paid search. Your brand's cost per click rises because Google lists auction competition as one of its ad rank factors — and in Brazil, the Superior Court of Justice has already ruled the practice constitutes unfair competition.

Media teams usually discover it through the report: the cheapest term in the account, the company's own name, starts climbing with no explanation. No change to bids, landing pages or seasonality. What changed is who is in the auction.

How the auction that sets your cost works

Every time someone searches, Google runs an auction. The official ad rank documentation lists six factors determining position:

The fourth item is the one that matters here, and it's there in Google's own words. Competition isn't noise outside the calculation — it is one of the calculation's variables. When a new advertiser enters the contest for your name, that term's auction stops being what it was.

Google is also explicit about the cost effect. The same page states that ads ranking well above others tend to win but the advertiser "may pay a higher cost per click for the same reason". There are also distinct minimum thresholds per position — the top of the page demands more than the bottom.

Worth noting what the documentation does not say: it publishes no pricing formula, doesn't describe a second-price auction, and doesn't explain how the ad ranked below you feeds into what you pay. Anyone presenting that formula as official is reproducing industry reverse-engineering, not a Google document.

Why does my CPC rise if the brand is mine?

Because the price belongs to the moment, not to the term. The auction repeats with every search and reflects that instant's competition.

In practice two effects compound. First, position pressure: to stay first on your own name, you now need more ad rank than you needed when you were alone. Second, and quieter — when a competitor appears above or beside you, part of the audience searching for you clicks them instead. Your click-through rate falls, and expected CTR feeds Quality Score, which is itself one of the six factors.

It's a self-reinforcing loop: fewer clicks today worsen your quality tomorrow, and worse quality costs more to hold the same position.

The economic aggravator is that brand terms are usually the cheapest and most profitable line in the account, because purchase intent already exists. When that line gets expensive, the damage isn't proportional to the CPC increase — it's larger, because it hits precisely what was carrying the operation's return.

Does Google allow buying my brand name?

As a keyword, yes. In ad text, no.

Google's trademark policy applies to ad content, not keyword targeting. In most regions Google does not investigate or restrict trademarked terms used as keywords.

Using the trademark in the headline, description or display URL is another matter: Google states it abides by local trademark law and disallows ads infringing those rights. There are exceptions — resellers with landing pages dedicated to selling that product, and informational sites about it.

Enforcement is complaint-driven. Google reviews only when the rights holder files, and a restriction typically applies to all ads using the same second-level domain in their final URL. Nobody will block this on your behalf. The case only moves when someone opens it.

What Brazilian courts say

Here the picture is far less ambiguous than platform policy.

In July 2024, the Third Panel of Brazil's Superior Court of Justice upheld a ruling against Google in REsp 2,096,417, reported by Justice Nancy Andrighi. Three findings matter operationally:

A trademark is not a generic word. Using it as a keyword to route the consumer to a competitor constitutes fraudulent means, because the user expects to find the brand they searched for in the first results.

The search engine is liable. The safe-harbour limitation in Brazil's Internet Civil Framework doesn't apply to selling sponsored links. In the reporting justice's words, there the provider "is not a mere host of third-party content, but a supplier of digital advertising services", and "has active control over the keywords it is commercialising".

The injunction has limits. The court narrowed the lower ruling to prohibit selling the keyword only to competing companies — a blanket ban would harm the trademark owner itself and firms in unrelated sectors, which may still advertise on the term.

That last point is the most misunderstood. There is no such thing as "blocking my brand on Google Ads". There is preventing competitors from buying it — and overlapping commercial activity between the two companies is exactly what must be demonstrated.

How to tell whether it's happening to you

Four signals, easiest first:

Manual search is the most intuitive and the least reliable. The auction repeats per search, results vary by location, device and time, and brand bidders often schedule dayparting. You check at ten in the morning and see nothing; the ad runs at night, in another state.

Serious detection is therefore continuous monitoring, not sampling. And it's worth sizing the problem before acting.

What to do when you find it

The sequence that works has three steps, and most companies jump straight to the third.

First, evidence. Dated capture of the ad, search term, region, time and destination URL. Without it, neither the platform complaint nor the legal route advances.

Second, the platform channel. If the competitor uses your trademark in ad text, a complaint to Google usually resolves it, because that's a clear policy violation. If they use it only as a keyword and keep the text clean, the platform likely won't act — and this is where most companies stall.

Third, a formal notice. This step resolves a good share of cases without litigation, especially after the Superior Court precedents. Many advertisers run brand bidding on agency advice, without legal review, and back down when they receive a well-founded notice.

Worth remembering it isn't always unlawful. Case law requires overlapping commercial activity between the trademark holder and the keyword buyer. A company in an unrelated sector using a term that happens to match your name is a different case.

Frequently asked questions

Is buying a competitor's brand a crime?

Brazil's Superior Court frames the conduct under article 195, III of the Industrial Property Law, covering fraudulent means to divert clientele — typified as a crime of unfair competition. In practice cases run in civil court, seeking damages and an injunction.

If I raise my bid, does that fix it?

It eases the symptom and worsens the economics. You keep paying more for the same click that was already yours, and the competitor stays in the auction. Bidding is temporary containment, not a solution.

Should I stop advertising on my own brand?

Almost never. Without your ad, the space belongs entirely to whoever bought the term, and the organic result sits below the paid ones. The cannibalisation debate between paid and organic changes completely when there's a competitor in the auction.

Does Google warn me when someone buys my brand?

No. There's no trademark-holder alert, and enforcement is complaint-driven. Finding out is your responsibility.

How long until the ad comes down?

It depends on the route. A complaint about improper use in ad text tends to be faster, being an objective policy violation. Keyword-only cases rarely resolve through the platform and tend to require formal notice or litigation — with no deadline published by Google.

If your brand's CPC has risen and you don't know who entered the auction, the first step is measuring. See how unfair competition protection works, or talk to us to size up your case.

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